REPUBLIC ACT NO. 8799
THE SECURITIES REGULATION CODE
Be it enacted by the Senate and the House of Representative of the Philippines in the Congress assembled:
CHAPTER I
TITLE AND DEFINITIONSSection 1. Title. - This shall be known as "The Securities Regulation Code"
Section 2. Declaration of State Policy. – The State shall establish a socially conscious, free market that regulates itself, encourage the widest participation of ownership in enterprises, enhance the democratization of wealth, promote the development of the capital market, protect investors, ensure full and fair disclosure about securities, minimize if not totally eliminate insider trading and other fraudulent or manipulative devices and practices which create distortions in the free market. To achieve these ends, this Securities Regulation Code is hereby enacted.
Section 3. Definition of Terms. - 3.1. "Securities" are shares, participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instruments, whether written or electronic in character. It includes:
(a) Shares of stocks, bonds, debentures, notes evidences of indebtedness,...
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Republic Acts
THE SECURITIES REGULATION CODE
Republic Act No. 8799
Summary of Republic Act No. 8799 (The Securities Regulation Code)
Declaration of State Policy (Section 2)
- Establish a socially conscious, self-regulating free market
- Encourage widespread ownership of enterprises
- Enhance democratization of wealth
- Promote capital market development
- Protect investors
- Ensure full and fair disclosure about securities
- Minimize insider trading and fraudulent practices
Definition of Terms (Section 3)
- Defines key terms like "securities", "issuer", "broker", "dealer", "clearing agency", "exchange", "insider", "pre-need plans", "promoter", "prospectus", "registration statement", "salesman", "uncertificated security", and "underwriter"
Securities and Exchange Commission (Sections 4-7)
- Establishes the Securities and Exchange Commission (SEC) as the administrative agency
- Outlines the composition, qualifications, powers, and functions of the SEC
- Authorizes the SEC to reorganize and streamline its operations
- Allows the SEC to retain and utilize P100 million from its income
Registration of Securities (Sections 8-15)
- Requires registration of securities before sale or offering (Section 8)
- Outlines exempt securities and transactions (Sections 9-10)
- Regulates commodity futures contracts (Section 11)
- Specifies registration procedures and requirements (Sections 12-14)
- Allows suspension or revocation of registration (Section 13)
- Permits amendment of registration statements (Section 14)
- Allows suspension of registration (Section 15)
Regulation of Pre-Need Plans (Section 16)
- Requires registration and regulation of pre-need plans by the SEC
Reportorial Requirements (Sections 17-18)
- Requires periodic reports from issuers (Section 17)
- Requires disclosure of 5% or more ownership (Section 18)
Protection of Shareholders' Interests (Sections 19-23)
- Regulates tender offers (Section 19)
- Regulates proxy solicitations (Section 20)
- Imposes fees for tender offers and proxy solicitations (Section 21)
- Requires internal record keeping and accounting controls (Section 22)
- Regulates transactions of directors, officers, and principal stockholders (Section 23)
Prohibitions and Fraud, Manipulation and Insider Trading (Sections 24-27)
- Prohibits manipulation of security prices and fraudulent devices (Section 24)
- Regulates option trading (Section 25)
- Prohibits fraudulent transactions (Section 26)
- Prohibits insider trading and imposes disclosure requirements (Section 27)
Regulation of Securities Market Professionals (Sections 28-31)
- Requires registration of brokers, dealers, salesmen, and associated persons (Section 28)
- Allows revocation, refusal or suspension of registration (Section 29)
- Regulates transactions and responsibilities of brokers and dealers (Section 30)
- Requires development of securities market professionals (Section 31)
Exchanges and Other Securities Trading Markets (Sections 32-38)
- Prohibits use of unregistered exchanges (Section 32)
- Outlines requirements for registration of exchanges (Section 33)
- Segregates functions of member brokers and dealers (Section 34)
- Imposes additional fees on exchanges (Section 35)
- Grants powers to the SEC over exchanges and trading markets (Section 36)
- Requires registration of innovative trading markets (Section 37)
- Requires independent directors for listed companies (Section 38)
Registration, Responsibilities and Oversight of Self-Regulatory Organizations (Sections 39-40)
- Allows registration and regulation of self-regulatory organizations (Section 39)
- Grants powers to the SEC over self-regulatory organizations (Section 40)
Acquisition and Transfer of Securities and Settlement of Transactions (Sections 41-47)
- Prohibits use of unregistered clearing agencies (Section 41)
- Outlines requirements for registration of clearing agencies (Section 42)
- Allows uncertificated securities (Section 43)
- Establishes evidentiary value of clearing agency records (Section 44)
- Allows pledging of securities (Section 45)
- Establishes issuer's responsibility for wrongful transfer (Section 46)
- Grants powers to the SEC regarding securities ownership (Section 47)
Margin and Credit (Sections 48-50)
- Authorizes the SEC to prescribe margin requirements (Section 48)
- Imposes restrictions on borrowings by brokers and dealers (Section 49)
- Enforces margin requirements and borrowing restrictions (Section 50)
General Provisions (Sections 51-78)
- Establishes liabilities of controlling persons, aiders and abettors (Section 51)
- Requires accounts, records, reports, and examinations (Section 52)
- Authorizes investigations, injunctions and prosecution (Section 53)
- Imposes administrative sanctions (Section 54)
- Allows settlement offers (Section 55)
- Establishes civil liabilities for violations (Sections 56-61)
- Specifies limitation of actions (Section 62)
- Outlines amount of damages to be awarded (Section 63)
- Allows cease and desist orders (Section 64)
- Permits substituted service upon the SEC (Section 65)
- Regulates revelation of information filed with the SEC (Section 66)
- Clarifies effect of SEC actions and unlawful representations (Section 67)
- Authorizes special accounting rules (Section 68)
- Addresses effect on existing laws (Section 69)
- Allows judicial review of SEC orders (Section 70)
- Establishes validity of contracts (Section 71)
- Authorizes rules and regulations, and provides for effectivity (Section 72)
- Imposes penalties for violations (Section 73)
- Includes transitory provisions (Section 74)
- Allows partial use of SEC income (Section 75)
- Repeals inconsistent laws (Section 76)
- Includes separability clause (Section 77)
- Specifies effectivity date (Section 78)
Declaration of State Policy (Section 2)
- Establish a socially conscious, self-regulating free market
- Encourage widespread ownership of enterprises
- Enhance democratization of wealth
- Promote capital market development
- Protect investors
- Ensure full and fair disclosure about securities
- Minimize insider trading and fraudulent practices
Definition of Terms (Section 3)
- Defines key terms like "securities", "issuer", "broker", "dealer", "clearing agency", "exchange", "insider", "pre-need plans", "promoter", "prospectus", "registration statement", "salesman", "uncertificated security", and "underwriter"
Securities and Exchange Commission (Sections 4-7)
- Establishes the Securities and Exchange Commission (SEC) as the administrative agency
- Outlines the composition, qualifications, powers, and functions of the SEC
- Authorizes the SEC to reorganize and streamline its operations
- Allows the SEC to retain and utilize P100 million from its income
Registration of Securities (Sections 8-15)
- Requires registration of securities before sale or offering (Section 8)
- Outlines exempt securities and transactions (Sections 9-10)
- Regulates commodity futures contracts (Section 11)
- Specifies registration procedures and requirements (Sections 12-14)
- Allows suspension or revocation of registration (Section 13)
- Permits amendment of registration statements (Section 14)
- Allows suspension of registration (Section 15)
Regulation of Pre-Need Plans (Section 16)
- Requires registration and regulation of pre-need plans by the SEC
Reportorial Requirements (Sections 17-18)
- Requires periodic reports from issuers (Section 17)
- Requires disclosure of 5% or more ownership (Section 18)
Protection of Shareholders' Interests (Sections 19-23)
- Regulates tender offers (Section 19)
- Regulates proxy solicitations (Section 20)
- Imposes fees for tender offers and proxy solicitations (Section 21)
- Requires internal record keeping and accounting controls (Section 22)
- Regulates transactions of directors, officers, and principal stockholders (Section 23)
Prohibitions and Fraud, Manipulation and Insider Trading (Sections 24-27)
- Prohibits manipulation of security prices and fraudulent devices (Section 24)
- Regulates option trading (Section 25)
- Prohibits fraudulent transactions (Section 26)
- Prohibits insider trading and imposes disclosure requirements (Section 27)
Regulation of Securities Market Professionals (Sections 28-31)
- Requires registration of brokers, dealers, salesmen, and associated persons (Section 28)
- Allows revocation, refusal or suspension of registration (Section 29)
- Regulates transactions and responsibilities of brokers and dealers (Section 30)
- Requires development of securities market professionals (Section 31)
Exchanges and Other Securities Trading Markets (Sections 32-38)
- Prohibits use of unregistered exchanges (Section 32)
- Outlines requirements for registration of exchanges (Section 33)
- Segregates functions of member brokers and dealers (Section 34)
- Imposes additional fees on exchanges (Section 35)
- Grants powers to the SEC over exchanges and trading markets (Section 36)
- Requires registration of innovative trading markets (Section 37)
- Requires independent directors for listed companies (Section 38)
Registration, Responsibilities and Oversight of Self-Regulatory Organizations (Sections 39-40)
- Allows registration and regulation of self-regulatory organizations (Section 39)
- Grants powers to the SEC over self-regulatory organizations (Section 40)
Acquisition and Transfer of Securities and Settlement of Transactions (Sections 41-47)
- Prohibits use of unregistered clearing agencies (Section 41)
- Outlines requirements for registration of clearing agencies (Section 42)
- Allows uncertificated securities (Section 43)
- Establishes evidentiary value of clearing agency records (Section 44)
- Allows pledging of securities (Section 45)
- Establishes issuer's responsibility for wrongful transfer (Section 46)
- Grants powers to the SEC regarding securities ownership (Section 47)
Margin and Credit (Sections 48-50)
- Authorizes the SEC to prescribe margin requirements (Section 48)
- Imposes restrictions on borrowings by brokers and dealers (Section 49)
- Enforces margin requirements and borrowing restrictions (Section 50)
General Provisions (Sections 51-78)
- Establishes liabilities of controlling persons, aiders and abettors (Section 51)
- Requires accounts, records, reports, and examinations (Section 52)
- Authorizes investigations, injunctions and prosecution (Section 53)
- Imposes administrative sanctions (Section 54)
- Allows settlement offers (Section 55)
- Establishes civil liabilities for violations (Sections 56-61)
- Specifies limitation of actions (Section 62)
- Outlines amount of damages to be awarded (Section 63)
- Allows cease and desist orders (Section 64)
- Permits substituted service upon the SEC (Section 65)
- Regulates revelation of information filed with the SEC (Section 66)
- Clarifies effect of SEC actions and unlawful representations (Section 67)
- Authorizes special accounting rules (Section 68)
- Addresses effect on existing laws (Section 69)
- Allows judicial review of SEC orders (Section 70)
- Establishes validity of contracts (Section 71)
- Authorizes rules and regulations, and provides for effectivity (Section 72)
- Imposes penalties for violations (Section 73)
- Includes transitory provisions (Section 74)
- Allows partial use of SEC income (Section 75)
- Repeals inconsistent laws (Section 76)
- Includes separability clause (Section 77)
- Specifies effectivity date (Section 78)